Stryker Corporation (SYK) has purchased the assets of CHG Hospital Beds, Inc. – a privately-held low-height hospital bed maker headquartered in London, Ontario, Canada. The acquisition will grow one of Stryker's original product lines – hospital beds.
The all-cash deal is expected to be neutral to Stryker’s 2015 earnings per share, barring acquisition, integration-related and intangible amortization charges and accretive thereafter.
The purchase of CHG’s low-height beds that are designed to reduce the incidents of patient fall, is in line with Stryker’s commitment to offer products that enhance the quality of care for both patients and healthcare professionals.
Founded in 2003, CHG makes and markets a series of low-height hospital beds and related accessories across Canada, the U.S. and the U.K. Among CHG’s innovative offerings is the recently launched Spirit One bed which is an expandable low-height bariatric bed for the acute care segment.
This acquisition will bolster Stryker’s bed offerings while allowing the company to offer additional solutions to its customers.
Recently, there have been rumors hinting that Stryker may bid for U.K.-based Smith & Nephew plc (SNN) and offer a significant premium, likely to be about 30%, to the latter’s current share price. According to a latest Bloomberg report, a Stryker move for Smith & Nephew could come in as early as the next few weeks.
However, the bid is still being finalized and the timing is subjected to change. Meanwhile, as per one Bloomberg source, there is also a possibility that Stryker may not make an offer at all.
When the acquisition rumor first surfaced in May this year, Stryker denied any intention to make a takeover bid, thus ruling itself out for six months. The six-month cooling off period imposed by U.K.'s takeover rules ended on Nov 28, following which Stryker is free to make offers.
We believe that Stryker’s acquisition of Smith & Nephew will boost its competitive position in the hip and knee replacement market and open up avenues for growth in the wound-care management business. In addition, the acquisition will help Stryker capitalize on the potential opportunities in emerging markets.
Currently, Stryker carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the medical products industry include ICU Medical (ICUI) with a Zacks Rank #1 (Strong Buy) and Conatus Pharmaceuticals (CNAT) with a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment